Some nonprofits concerned that IRS scandal will stain their good work

           By Jill Warren Lucas
         Philanthropy Journal

State and national 501(c)(3) charities are expressing concern at being unfairly implicated by the growing scandal over the way the Internal Revenue Service's (IRS) Exempt Organizations Division has handled applications submitted by certain 501(c)(4) social welfare entities.

A report issued Tuesday night by the Treasury Inspector General for Tax Administration (TIGTA) was tellingly titled Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review. TIGTA conducted the audit based on allegations that the IRS process "1) targeted specific groups applying for tax-exempt status, 2) delayed processing of targeted groups' applications, and 3) requested unnecessary information from targeted groups."

Findings confirmed that the IRS used "inappropriate criteria that identified Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention." The audit also cited ineffective management, which allowed the practice to continue for more than 18 months; substantial delays in processing certain applications; and allowing unnecessary information requests to be issued.

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